ECON 102

Which of the following events would cause a movement downward and to the left along the supply curve for kiwis?

The price of kiwis falls.

Today, producers changed their expectations about the future. This change

can affect today's supply.

The presence of a price control in a market for a good or service usually is an indication that

policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers

Table 7-6During the last two days, Harry purchased a latte from two different stores. The table below shows Harry's willingness to pay on each day and his consumer surplus from each purchase. Refer to Table 7-6. The price that Harry paid for a latte on the first day is

$2.25.

Consider Miray's decision to go to college. If she goes to college, she will spend $24,000 on tuition, $12,000 on room and board, and $1,900 on books. If she does not go to college, she will earn $16,000 working in a store and spend $8,000 on room and board. Miray's cost of going to college is

$45,900.

Figure 6-10 The vertical distance between points A and B represents the tax in the market. Refer to Figure 6-10. The per-unit burden of the tax on buyers is

$8

A manufacturer produces 350 units when the market price is $10 per unit and produces 460 units when the market price is $14 per unit. Using the midpoint method, for this range of prices, the price elasticity of supply is about

0.81.

Suppose a gardener produces both tomatoes and squash in his garden. If he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his opportunity cost of 1 bushel of tomatoes is

1.6 bushels of squash.

Table 3-13Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. Refer to Table 3-13. The number of minutes needed by Juanita to program a cellular phone is

15

Refer to Figure 3-17. Suppose Daisy decides to increase her production of pies by 6. What is the opportunity cost of this decision?

8 tarts

Which of the following will cause an increase in consumer surplus?

A technological improvement in the production of the good

Refer to Figure 5-6. Along which of these segments of the supply curve is supply most elastic?

AB

Refer to Figure 3-22. Which of the following statements is correct regarding absolute advantage?

Betty has an absolute advantage in the production of both lemonade and pizzas.

If consumers often purchase croissants to eat while they drink their cappuccinos at local coffee shops, what would happen to the equilibrium price and quantity of cappuccinos if the price of croissants rises?

Both the equilibrium price and quantity would decrease.

According to the circular-flow diagram, if Christopher is the owner of a landscaping business and he just received $50 for mowing Mrs. Pendleton's lawn,

Christopher acts as a firm who interacted in the markets for goods and services with Mrs. Pendleton.

Refer to Figure 7-9. At equilibrium, producer surplus is represented by the area

D+H+F.

Refer to Figure 4-8. All else equal, an increase in the income of buyers who consider turkey to be an inferior good would cause a move from

Da to Db.

Which of the following statements does not apply to a market economy?

Government policies are the primary forces that guide the decisions of firms and households.

In the short run, which of the following is not correct? -Increasing the money supply increases the demand for goods and services. -Increasing the money supply encourages firms to hire more workers. -Lowering the money supply leads to a higher level of unemployment. -Policies that encourage higher employment will also induce a lower rate of inflation.

Policies that encourage higher employment will also induce a lower rate of inflation.

Refer to Figure 2-4, Graph (a) and Graph (b). Which of the following is not a result of the shift of the economy's production possibilities frontier from Graph (a) to Graph (b)?

Production of 2 tractors and 2 trucks becomes efficient.

Suppose that two supply curves pass through the same point. One is steep, and the other is flat. Which of the following statements is correct?

The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve.

Which of the following is not a characteristic of a perfectly competitive market?

There is no free entry or exit.

International trade may make some individuals in a nation better off, while other individuals are made worse off.

True

When can two countries gain from trading two goods?

Two countries could gain from trading two goods under all of the above conditions.

Refer to Figure 4-6. The shift from S' to S could be caused by

an increase in input prices.

If the demand for a product increases, then we would expect equilibrium price

and equilibrium quantity both to increase.

Suppose the interest rate is measured along the vertical axis on a graph. When the interest rate changes, there will be a

change in the slope of the curve.

On a graph, the area below a demand curve and above the price measures

consumer surplus.

Refer to Figure 6-2. The price ceiling causes quantity

demanded to exceed quantity supplied by 90 units.

Elasticity of demand is closely related to the slope of the demand curve. The more responsive buyers are to a change in price, the

flatter the demand curve will be.

Instead of conducting laboratory experiments to generate data to test their theories, economists often

gather data from historical episodes of economic change.

The "invisible hands" ability to coordinate the decisions of the firms and households in the economy can be hindered by

government actions that distort prices.

Refer to Figure 5-5. If the price decreased from $36 to $12, total revenue would

increase by $4,800, and demand is elastic between points X and Z.

Refer to Figure 5-7. If, holding the supply curve fixed, there were an increase in demand that caused the equilibrium price to increase from $6 to $7, then sellers' total revenue would

increase.

When large changes in price lead to no changes in quantity demanded, demand is perfectly

inelastic, and the demand curve will be vertical.

Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires

is unaffected, and the supply of tires could increase, decrease, or stay the same.

The supply of a good will be more elastic, the

longer the time period being considered.

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it

maximizes the combined welfare of buyers and sellers.

Goods with many close substitutes tend to have

more elastic demands.

When the government redistributes income from the wealthy to the poor, -people work less and produce fewer goods and services. -efficiency is improved, but equality is not. -both wealthy people and poor people benefit directly. -the government collects more revenue in total.

people work less and produce fewer goods and services.

Suppose that in a particular market, the supply curve is highly inelastic and the demand curve is highly elastic. If a tax is imposed in this market, then the

sellers will bear a greater burden of the tax than the buyers.

Refer to Figure 4-7. At a price of $15, there would be a

shortage of 400 units.

The market demand curve

shows how the total quantity demanded of a good varies as price varies.

Refer to Figure 3-25. Chile should specialize in the production of

soybeans and import coffee.

If the cross-price elasticity of two goods is positive, then the two goods are

substitutes.

Suppose the United States has a comparative advantage over Mexico in producing pork. The principle of comparative advantage asserts that

the United States should produce more pork than what it requires and export some of it to Mexico.

Figure 2-6 Consider the production possibilities frontier for an economy that produces only televisions and computers. When society moves from point A to point B,

the opportunity cost is the same as when society moves from point B to point C.

A production possibilities frontier is a straight line when

the rate of tradeoff between the two goods being produced is constant.

Suppose there are only two people in the world. Each person's production possibilities frontier also represents his or her consumption possibilities when

they choose not to trade with one another.

In the market for apartments, rent control causes the quantity supplied

to fall and quantity demanded to rise.